Author: samgeall

Famed anthropologist Marilyn Strathern, after a long career writing about Papua New Guinea, later turned her attention to the practices of university life in the United Kingdom. In particular, Strathern realized that the “(unanalyzable) nonsense” of university mission statements she encountered day-to-day were similar to a number of objects, including magical shields, that she had written about in her Melanesian fieldwork. Drawing on the anthropological literature, she compared these bullet-point-strewn documents to civil war fighters in Mozambique, whose marks on their chests were said to be “vaccinations” against bullets. In her terms, they were “protective aversion tactics”.

The relevance of this occurred to me recently in an unusual context: reading an excellent new overview of Chinese financial institutions’ energy investments, Policies Governing China’s Overseas Development Finance: Implications for Climate Change, by Kelly Sims Gallagher and Qi Qi at Tufts University, in Boston – and it has continued to resonate for me, as I’ve travelled to meetings in recent months in Latin America, Europe and Southeast Asia about Chinese overseas impacts.

In short, the idea of the magical document seemed familiar in confronting the great raft of Chinese government and trade-body documents – “guiding opinions”, “guidelines”, “measures”, “provisions”, “notices” and “circulars” – that cover overseas investments, and occupy much of our time and discussions as analysts, activists or other actors trying to understand or influence the path of these financial flows. Specifically, the report brought home how effective this documentation has been in occupying or averting the gaze – when they have been largely ineffective in actually shaping investment.

Of these many categories of document, write Gallagher and Qi, only “guiding opinions” and “guidelines” include enforcement mechanisms for non-compliance. But they still do not have teeth. These mechanisms might include a deduction in the annual inspection score or “a record of ‘bad credit’”, perhaps even the potential loss of business qualification if the enterprise has “violated the relevant laws and regulations and caused serious consequences”, but there is no detail on how this might occur – and it has not. Instead, as Gallagher and Qi put it:

“So far, no companies have been publicly reported to be punished due to environmental problems related to overseas investments, and the bad credit list is not made transparently available, so it is hard to determine the extent of non-compliance without field research and independent verification.”

For all the work that has been done developing these documents, writing and discussing their likely effects and possible implementation, it seems oddly obscure, and seldom noted – other than in this excellent review – that there have been no penalties for non-compliance in these many attempts to “promote” (or “encourage”, or “guide” etc.) a greener Belt and Road. As the authors put it:

“the fragmented measures taken during this period are not sufficiently comprehensive to have effectively internalized the substantial environmental externalities to bring about real stimulus in green investment.”

As the authors note, this is a far cry from the comprehensive and enforceable industrial policy put forward domestically in China, which has spurred the extensive restructuring of investment away from polluting industries and towards innovation and cleaner technology. The result is that while China’s coal consumption appears to be in long-term decline, between 2001 and 2016, Chinese financial institutions supported the construction of more than fifty coal-fired power plants abroad that were either under construction or operational – the majority of them using carbon-intensive sub-critical technology. And this is despite the Chinese government’s commitment to “strengthen green and low-carbon policies and regulations with a view to strictly controlling public investment flowing into projects with high pollution and carbon emissions both domestically and internationally” in the 2015 U.S.-China Joint Statement on Climate Change.

For Gallagher and Qi, the answers lie in further tightening of the policies government overseas investment, in focusing on bank rules, forming industrial policy that favors China’s most innovative industries “going out”, and in encouraging recipient countries to adopt strong environmental rules at home. For me, the report may also caution against over-emphasis on the proliferation of Chinese government documents that thus far characterized the overseas investment debate, when other approaches – be it legal challenges, civil society and media collaboration, new models of activism – might warrant greater attention.

Sam Geall is Executive Editor of chinadialogue.net, and an Associate Fellow at the Chatham House Energy, Environment and Resources Department. He is also Associate Faculty at the Science Policy Research Unit (SPRU) at the University of Sussex, UK

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This blog is started by those who aspire to tell a better story about China’s involvement beyond its borders. We are journalists, campaigners, analysts, scholars and practitioners with years of experience navigating Chinese politics, bureaucracy, finance and their ramifications overseas.

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Ma Tianjie

Founder/Editor

Ma Tianjie has been involved in policy analysis and environmental advocacy in China for over a decade. He also runs Chublic Opinion, a popular Chinese public opinion blog. He was an English major at Peking University and later earned his Master’s degree in environmental policy from American University. His areas of interest include China’s overseas footprint, environmental governance and online public opinion.

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Calvin Quek

Editor

Calvin is a Visiting Fellow at the Tsinghua University Finance and Development Center, focusing on green finance development in developing countries. He is also head of Greenpeace East Asia’s Sustainable Finance Program and leads its engagement of the financial community. In the past, Calvin served on the Board of the China Carbon Forum, and was the first Executive Director of the Beijing Energy Network. Prior to coming to China, Calvin worked at Citigroup for close to a decade. Calvin has an MBA from Peking University, and an MSc in Wealth Management from Singapore Management University.

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Tom Baxter

Editor

Tom Baxter works in communications at Greenpeace East Asia covering climate and energy issues ranging from air pollution to Chinese overseas investments. He works in the intersections between journalism and the NGO world and his writing has previously appeared in The Economist, South China Morning Post, China Dialogue, and elsewhere. Tom studied history at the University of Glasgow and Hong Kong University. His interests include China’s increasing global influence and the role of the media as an agent in public debate. He also maintains a keen interest in literature and the Chinese language.